Tax Audit Lawyers in Bountiful
An "audit" is an administrative proceeding in Bountiful, Utah whereby the IRS, or a local tax-collection agency looks at a person's (or business's) tax filings in more detail than they do in ordinary cases. This is normally done when the tax return has a suspicious discrepancy on it, or if the taxpayer was simply picked at random. It's not uncommon for tax authorities to conduct random audits, providing people with an incentive to be honest on their taxes, knowing that they could be audited at random.
In Bountiful, Utah, the process of a tax audit is typically not complicated. If you get a letter saying that you have been chosen for an audit, you should still take it seriously, however. The first thing you need to do is confirm that you are really being audited, because there are fraudsters who impersonate tax collectors, attempting to squeeze money out of innocent victims. When you receive such a letter, you should use the phone book or Internet to find the contact info for the government agency that the letter claims to be from, and contact them. Do not rely on any contact information provided in the letter, as it may direct you to the scammer, who will just pretend to be a representative of the IRS.
After confirming that the audit you're facing is really legitimate, there are a few things you can do to prepare. Initially, you should assemble all of the appropriate documents you have in your possession. This should include your tax return, W-2 forms, and records of any expenses that you claim as deductions. You should bring these documents, and any others that the auditor requests, to the meeting. At the meeting, the auditor will ask you a number of questions, which you should answer honestly and to the best of your knowledge.
Reasons For a Tax Audit in Bountiful, Utah
There are plethora of reasons why Utah's government, or the federal government, might conduct a tax audit.
As considered earlier, tax audits can be conducted at random. Evidently, the government doesn't have the resources to audit every taxpayer under their jurisdiction. But, by conducting a considerable number of random audits each year, taxpayers are, in theory, discouraged from cheating on their taxes, because they know that they might be audited randomly. If you are chosen for a random audit, and have done everything right, you almost definately have nothing to worry about.
Nonetheless if the IRS or other tax agency suspects actual wrongdoing by a Bountiful, Utah taxpayer, that's a different matter. There are various different reasons why a government might determine to audit a taxpayer. The most frequent one is suspicion that they have underreported their income. If a taxpayer buys a massive number of expensive luxury items, but reports little or no income on their tax returns, the government will definitely want to discover where the money to buy all those things came from, and why it hasn't been declared as taxable income.
Claiming an unusually-high number of deductions is another frequent reason for tax audits in Bountiful, Utah. A tax deduction is some expenditure that you can subtract from your taxable income, thereby reducing your tax liability. If you claim such a wide number of deductions that your tax liability has been reduced to almost nothing, the IRS will probably want to make sure that all of these deductions are legitimate.
How Can A Bountiful, Utah Tax Lawyer Help?
If you find yourself on the business end of a tax audit in Bountiful, Utah, and you are sure that you have reported all of your income, and not claimed any invalid deductions, chances are you were just chosen at random for an audit, and you likely don't have any cause for concern, other than the inconvenience that an audit represents. If you are deemed to owe any back taxes, and your failure to pay in the past was the result of an honest mistake, you'll likely be afforded a chance to pay any taxes you owe from past years, with the possible addition of interest.
Nonetheless, if the situation is more complicated, you may need to hire a Bountiful, Utah tax attorney. A tax attorney can help you through your audit, and make sure it goes as smoothly as possible.